Labor agreement keeps CFL rolling

A major football league has imminent plans to announce a
groundbreaking labor deal, helping to stave off player unrest and a possible
work stoppage.

Sorry, NFL fans. It’s the Canadian Football League, whose
regular season is scheduled to kick off this week, presuming the paperwork is
finished on the labor pact that was tentatively agreed to in late May.

Touting itself as
“Canada’s league,” the CFL has had its recent ups and downs. Average attendance
in 1994 fell to its lowest mark since 1969 (less than 22,000) as the league
expanded to add U.S. teams. But a stadium building boom approaching $900
million in total spending, improved TV numbers and attendance up to nearly
29,000 a game last year are signs that the league (now with eight
Canadian-based clubs) is headed in the right direction.

Perhaps most important is the new labor deal, which will keep
a salary cap but sever it from overall revenue, sources said. That’s a major
departure from how these deals are structured in the United States, where
salary caps typically are determined by a percentage of league revenue.

The CFL had been paying
players about 56 percent of net revenue but will now have a fixed team cap each
year, currently at $4.2 million (Canadian) for each of the eight clubs. The CFL
declined to comment on the pending labor deal, citing its unfinished nature.

“Hockey is Canada’s game, but the CFL is Canada’s league,”
said Mark Cohon, the CFL’s commissioner since 2007 and a former MLB and NBA
executive. “Forty-three percent of Canada tuned in to the Grey Cup, and this
year’s Cup sold out 5 1/2 months in advance.”

With the 100th Grey Cup league championship game scheduled in
2012, the CFL is building marketing plans around that date and expects to
announce several big sponsors in the coming months.

Cohon cites stadium expansion in the CFL
as the impetus for a new labor agreement.

Before Cohon, the CFL had become known for backroom squabbles
and ownership difficulties. Its marketing could be quirky, with one slogan a
decade ago the obvious double entendre “Our balls are bigger.” (The CFL uses a
bigger game ball than the NFL, in addition to playing on a 110-yard field and
with only three downs.)

The league in the 1990s needed a $3 million loan from the NFL
just to stay afloat. It has since been repaid. Now, seven of the league’s eight
teams have major building projects under way, and Cohon, learning from his U.S.
sports experience, has encouraged the teams to focus on the grassroots, family
experience.

“The CFL gets a tremendous amount of support — grassroots
support — in the West,” said Reg Bronskill, who runs a Canadian-based sports
event and marketing company. “In Toronto, it is much more challenging because
there are so many other sports available.

“Back in the ’90s, there was the thought the NFL would nudge
them out,” Bronskill said. “I don’t think that will happen. There are too many
people in Canada who think the product is a real product.”

Five of the eight CFL
teams are privately owned, with three community controlled, like the Green Bay
Packers. Some of the teams are profitable, but Cohon, like his NFL
counterparts, cites the cost of stadium expansion as necessitating a new labor
deal.

Among the league’s stadium projects is a $400 million upgrade
to BC Place, home of the BC Lions, that includes the addition of a retractable
roof to the 27-year-old venue. The Lions are playing at a temporary home this
season before returning next year to BC Place, when it also will become the home
of Vancouver’s MLS expansion club.

Additional facility projects in Edmonton, Hamilton and
Winnipeg are each valued in excess of $100 million.

On the TV front, the league is talking to the NFL about
putting games on the NFL Network and also is talking to ESPN. Currently, there
is no deal to televise games in the U.S. this season.

Expansion is on the horizon, too, with another team slated for
Ottawa, pending a City Council vote on a local stadium development plan. The
league would like to expand into eastern Canada, as well.

The CFL has no issues with the Buffalo Bills playing a
regular-season game in Toronto, Cohon said. “So far, it has had no impact on
our league,” he said of the NFL initiative that began in 2008. And financially,
the CFL is little threat to the NFL, which has approximately $8.5 billion in
annual revenue. The CFL by comparison has roughly $150 million in revenue, or
well less than the amount just one NFL team generates.

There also, in Canada, is the matter of competing for fan
interest and dollars with the NHL.

“Whenever you have capital investment in a sector, it shows
the sector is on an upswing,” said Tom Mayenknecht, a Vancouver-based sports
radio show host. “Having said that, it is still, comparatively speaking, a
small business compared to a large business such as the NHL.”

Mayenknecht noted that the CFL, despite some nice TV numbers,
is still primarily a gate-driven business.

But the CFL does appear to have labor peace. The NFL’s labor
deal expires in March, and the league and its players are far apart on reaching
a new agreement.